Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. a pension fund manager is considering three mutual

A pension fund manager is considering three mutual funds. The first is a stock fund, the...

70.2K

Verified Solution

Question

Finance

A pension fund manager is considering three mutual funds. Thefirst is a stock fund, the second is a long-term government andcorporate bond fund, and the third is a T-bill money market fundthat yields a sure rate of 4.4%. The probability distributions ofthe risky funds are:

   

Expected ReturnStandard Deviation
   Stock fund (S)14%        34%         
   Bond fund (B)5%        28%         

   

The correlation between the fund returns is .0214.

   

What is the expected return and standard deviation for theminimum-variance portfolio of the two risky funds? (Do notround intermediate calculations. Round your answers to 2 decimalplaces.)

   

  Expected return%
  Standard deviation%

Answer & Explanation Solved by verified expert
4.2 Ratings (609 Votes)
    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

A pension fund manager is considering three mutual funds. Thefirst is a stock fund, the second is a long-term government andcorporate bond fund, and the third is a T-bill money market fundthat yields a sure rate of 4.4%. The probability distributions ofthe risky funds are:   Expected ReturnStandard Deviation   Stock fund (S)14%        34%            Bond fund (B)5%        28%            The correlation between the fund returns is .0214.   What is the expected return and standard deviation for theminimum-variance portfolio of the two risky funds? (Do notround intermediate calculations. Round your answers to 2 decimalplaces.)     Expected return%  Standard deviation%

Other questions asked by students

Q

Find the probability of obtaining exactly one tall when flipping ten coins. Express your answer...

Algebra
Q

IBM annual report for the fiscal year ended as on 2018 gives disclosures related to its...

Finance
Q

What are the managerial implications of GREEN LIFESTYLE CONSUMERS if they APPRECIATE LOW INVOLVEMENT GREEN PRODUCTS?

Psychology
Q

24 An ideal H gas undergoes a isothermal process according to the P V diagram...

Physics
Q

A loade vertical spring executes S H M with time period of 4 s The...

Physics
Q

Use the following formula for problem 8 9 P A n S Total Sample Space...

Geometry
Q

Three boxes colored red, orange, and blue are to be randomly ordered from left to...

Basic Math
Q

Required: Determine the missing amounts in each of the following four independent scenarios: a. X...

Accounting
Q

Refer to Figure 17.2. Suppose Sam's utility from income is given in the diagram. From...

Accounting
Q

Use the following to answer questions 1-3: Durham Corporation has a Motor Division that produces...

Accounting
Q

El saldo de Cuentas por Cobrar de la Compaa Ruiz al 31 de diciembre era...

Accounting
Q

..1 T-Mobile 1:30 PM 53%

Finance